Haskins Contractors Pty Ltd v Jakovceski [1999] ACTSC 106 (18 October 1999)

Last Updated: 12 May 2005

HASKINS CONTRACTORS PTY LIMITED v VASE JAKOVCESKI [1999] ACTSC 106 (18 October 1999)

CATCHWORDS

APPEAL - workers' compensation - employer's insurer initially made payments on the basis that worker is totally incapacitated - insurer then terminated payments - an interim order then made by Magistrate that payments must resume on the basis worker is partially incapacitated - whether Magistrate lacked jurisdiction to make the order due to formal defects in employee's application - decided that formal defects had been cured by solicitor's subsequent action - whether Magistrate erred in making interim orders on the basis worker was partially incapacitated when employee's initial request was for payments for total incapacity - decided that Magistrate not in error - appeal dismissed.

Workers' Compensation Act 1951 (ACT)

Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1

Anderson v Australian Postal Commission (1981) 39 ALR 94

Woden Valley Glass v Psaila [1993] FCA 399; (1993) 122 ALR 387

Park Royal Motor Hotels Pty Ltd v Sullivan (1985) 61 ACTR 15

Barbaro v Leighton Contractors Pty Ltd (1980) 30 ALR 123

Pettitt v Dunkley (1971) 1 NSWLR 376

Archbishop of Perth v AA to JC (1995) 18 ACSR 333

C & S Insulation Service Pty Ltd v Copley (1997) 136 FLR 317

ON APPEAL FROM THE MAGISTRATES COURT

No. SCA 17 of 1999

Judge: Higgins J

Supreme Court of the ACT

Date: 18 October 1999

IN THE SUPREME COURT OF THE )

) No. SCA 17 of 1999

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE MAGISTRATES COURT

BETWEEN: HASKINS CONTRACTORS PTY LIMITED

Appellant

AND: VASE JAKOVCESKI

Respondent

ORDER

Judge: Higgins J

Date: 18 October 1999

Place: Canberra

THE COURT ORDERS THAT:

1. The appeal be dismissed.

1. This is an appeal from a decision of Magistrate Madden, made on 9 March 1999. His Worship was exercising the jurisdiction conferred by the Workers' Compensation Act 1951 (ACT) (WC Act).

2. The respondent worker had applied, by Notice of Motion dated 11 February 1999, for an order that:

"The respondent [appellant/employer] reinstate the applicant's workers' compensation payments from 4.11.1997 and continuing."

3. The worker's application was supported by affidavit evidence both annexing medical reports and describing how he came to suffer injury. He describes being injured on 19 March 1997 at work when he slipped on a step ladder whilst descending with an acetylene bottle. He landed awkwardly, heavily straining both his lower back and his right knee joint. It seems that a fracture of the margin of the patella occurred. Pain in the patella region has persisted.

4. The employer's insurer, MMI, accepted liability on the employer's behalf and paid benefits under the WC Act, initially on the basis that the worker was totally incapacitated for work within the meaning of that Act.

5. Payments continued until, it appears, 4 November 1997.

6. On 22 August 1997, MMI gave a notice of "Termination of Weekly Workers' Compensation Payments". A notice in similar terms was later given on 2 September 1997. That notice advised that payments would cease on 3 November 1997. The latter is, I infer, the notice intended to be relied upon by the insurer. The notice purported to accord with s 26C of the WC Act. It stated:

"The decision to take this action is based on having considered the medical report of Dr Goldrick who examined you on 07/08/97 and who advised (amongst other matters) that it was his impression that you were fit for your pre-injury hours and duties, there is no reason why you cannot cary our (sic) normal duties as a construction labourer. It is MMI's opinion that you are not entitled to continued weekly payments as you are not longer incapacitated for work by your alleged injury on 19 March, 1997."

7. Under s 26C(1), WC Act, an employer, within twelve months from the date of the claim first being lodged, may terminate payments:

"...if, in the opinion of the employer's insurer ... based on reasonable grounds, the worker is no longer entitled to receive the payments."

8. The form of the notice apparently complied with s 26C(2).

9. The WC Act under s 26D offers to a worker an option to review such a termination by applying to the Court to have the payments continue or re-commence.

10. Subsection 26D(4) provides:

"On application by any party, or of its own motion, the Court may make such interim orders in relation to an application under subsection (1) as it considers appropriate pending its final decision."

11. It is not entirely apparent why the worker waited until 11 February 1999 to seek reinstatement of weekly payments. No doubt some of that delay would have resulted from the need to obtain medical evidence.

12. It appears that, despite Dr Goldrick's opinion, the plaintiff continued to complain of continuing pain and disability in the right knee. His solicitor, in support of his application annexed:

* An operation report from Dr Michael Gillespie, dated 5 June 1998. He found and excised a patella fragment.

* A report of Dr David Hughes, Sports Physician, dated 14 September 1998, stating:

"I believe that the operation carried out by Dr Michael Gillespie on 5 June 1998 on the right knee of Vase Jakovceski, as a result of the injury sustained on 21 March 1997, in someone with a congenital bipartite patella."

The last sick certificate I issued to Mr Jakovceski was on 22 October 1997 and I considered that he was eligible to do full time light duties with no lifting in excess of 10kgs and no sweeping in excess of 10 minutes per hour. I only reviewed Mr Jakovceski once more which was approximately two weeks later (5/11/97) and since then I have not seen him."

* A report of Dr P Maguire, dated 9 December 1998, detailed 7 consultations involving:

"...ongoing symptoms in the right knee and the low back consisting of pain and stiffness in the right knee ... Low back pain persists ...

...In Vase's current medical status it would be advisable for him not to return to his former labouring position as this might exacerbate his back injury and or knee injury and lighter duties would be recommended."

13. Those opinions, if accepted and found to be based on genuine complaints of pain and disability, would have made it arguable that, though the worker had ceased to be physically incapable of any work activity, he was not at any stage fit for his prior employment. He was fit only for light duties. That would raise an issue as to whether such duties were practically available.

14. The worker provided an affidavit stating that he had attempted a partial return to work on light duties in early May 1997. His employment was terminated on 8 August 1997 due to the lack of continued availability of such duties. He described the financial hardship he had suffered since the cessation of his compensation payments.

The proceedings on 9 March 1999

15. Mr Thomas, counsel for the worker, told Magistrate Madden at the outset that the worker was applying for an interim order reinstating payments until final arbitration of the matter.

16. It was submitted, on behalf of the worker, that the material supporting the worker's substantive application demonstrated both a seriously arguable claim for relief and such financial need as to support a view that the balance of convenience favoured an interim grant of such relief.

17. In response, Mr Lunney, for the employer, relied on Dr Goldrick's report of 11 August 1997, which he then tendered.

18. That report detailed the history of the matter. Dr Goldrick, consistently with other reports, found no significant abnormality. He did accept that X-rays revealed a "multi-partite patella" and a fracture of the lateral margin of the patella but considered those matters to be "irrelevant" to the ongoing complaints of pain. He concluded:

"In summary, I could find no evidence of any bone, joint or musculo-skeletal disorder to account for this man's symptoms. It is thus my opinion that his complaints are not genuine and that there is no obvious reason why he cannot continue with his occupation as a labourer. I can certainly find no convincing evidence that Mr Jackovceski [sic] has suffered any permanent damage as a result of the events of 19 March 1997."

19. Even if it be accepted that there was no apparent abnormality found, it does not follow that the worker was not genuinely suffering pain and disability. Such a finding goes no further than to support an argument that the claim was not genuine. The lack of a physical explanation for unfitness for work does not establish the contrary.

20. It could not be said that Dr Goldrick's report, predating the worker's submission to, and the findings of, operative treatment, rendered it improbable that the worker would succeed in persuading the Court of the genuineness of his claimed disabilities.

21. His Worship noted that there was, clearly, a variance between the medical opinions presented to him.

22. Mr Lunney plainly recognised that the worker's application could not be rejected merely on the medical evidence. Resolution of his claim plainly depended on an assessment of his credibility, an assessment neither appropriate nor possible in the context of the application before his Worship.

23. It was, however, Mr Lunney's submission to his Worship that the issue was not whether the worker could be found to have continued to suffer some level of disability but, rather, whether the evidence supported a finding that he continued to be totally incapacitated. He submitted that the reports relied on by the worker, even if accepted at their highest, did not amount to an assertion of more than partial incapacity. There was no evidence suggesting that the incapacity was, in truth, total in the sense that, despite a residual physical capacity, there was a lack of an available market for his residual capacity (see eg. Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1; Anderson v Australian Postal Commission (1981) 39 ALR 94; Woden Valley Glass v Psaila [1993] FCA 399; (1993) 122 ALR 387; Park Royal Motor Hotels Pty Ltd v Sullivan (1985) 61 ACTR 15). Thus, Mr Lunney contended, whilst there might be a case for an award based on partial incapacity, there was no arguable case for the continuance of payments based on total incapacity.

24. Mr Thomas' reply was that it had been open to the employer to have characterised its payments to the worker as "partial incapacity" payments or total incapacity payments. It was aware that the worker's claimed level of incapacity was not total when it terminated his employment and continued payments. It followed that there was, at least, a seriously arguable case for a finding of partial incapacity as a basis for continuing payments.

25. In reply, Mr Lunney pointed to Barbaro v Leighton Contractors Pty Ltd (1980) 30 ALR 123. The effect of that decision, he contended, was that there was "no room" for determination of partial incapacity. Further, there was no evidence of the value of the worker's partial capacity so as to fix the quantum of the benefit payable.

26. His Worship found that there was a substantial issue to be tried as to whether there had been total or partial incapacity, though he declared himself satisfied that there was partial incapacity for work, "particularly since 5 June 1998". His Worship ordered, on an interim basis, that payments be reinstated "from 5 June 1998 on a partial incapacity basis".

27. That, it will be observed, did not completely satisfy the worker's claim for interim relief.

28. On 30 March 1999, the employer filed a Notice of Appeal seeking to have that order set aside.

The hearing of the Appeal

29. The appeal was heard on 17 August 1999.

30. Mr Stretton, for the employer, submitted that there had been no jurisdiction to make the interim order. He took exception to the lack of reasons for the decision, relying on Pettitt v Dunkley (1971) 1 NSWLR 376. It is true that his Worship did not explain why he was satisfied that there had been (prima facie) partial incapacity as from 5 June 1998. However, it was a finding in support of an interim order granted summarily and supported by ex tempore remarks. I do not think that his Worship should be criticised for brevity in that context.

31. The findings are, I believe, clear enough. His Worship took the view that it did not appear to be arguable that total incapacity continued beyond 5 June 1998. However, there was an arguable case that partial incapacity had been present at least from 5 June 1998, whether incapacity was partial or total or otherwise for all or part of the time before then.

32. It is true that his Worship did not explain his choice of 5 June 1998. It is, however, a short time after the operation of 2 June 1998 performed by Dr Gillespie which Dr Young reported as having been on "5 June 1998". That error or imprecision, if it be one, favours the appellant. It suggests that his Worship was satisfied that there was evidence, capable of acceptance, that the worker had, since his knee operation, been partially incapacitated for work, whatever the previous position may have been.

33. There was a preliminary issue. The employer sought leave to amend its Notice of Appeal to complain that the filing of a Notice of Motion was an inappropriate procedure to found the making of an interim order. The Notice of Motion purported to seek final relief under s 26D(1) of the WC Act. However, even if Form 1 (Workers' Compensation Rules r 13) (the suggested method) was the appropriate form, the defect was purely formal and capable of being cured. In fact it was. On 13 March 1999, the worker's solicitor filed a Request for Arbitration in accordance with Form 1. That pre-dated the order made on the Notice of Motion. To my mind nothing turns on the fact that argument and evidence predated the filing of that document. Indeed, even in this Court, interim orders can be made in advance of an originating application. I can think of no reason why, if it appeared to be in the interests of justice to do so, a Magistrate under the WC Act and Rules could not have proceeded without Form 1 to make interim orders, on the understanding, of course, that any procedural defects were later rectified.

34. Indeed, though procedural errors are not to be encouraged, they should not produce injustice either. In Archbishop of Perth v AA to JC (1995) 18 ACSR 333 the Court of Appeal (NSW) acted upon a summons seeking extension of time as if it was a statement of claim (in any event, see WC Rules, 88(2)).

35. The respondent had also applied to introduce new evidence. However, as grounds 1, 2 and 3 of the Notice of Appeal were abandoned, that was not pressed. That "new evidence" went only to the issue as to whether there was evidence to support a finding of partial incapacity. The appellant conceded that there was such evidence, even without that "new evidence".

36. The remaining submission of the employer was that the balance of convenience did not favour the making of the order or, at least, was not considered or made the subject of reasons.

37. There is, in my view, no substance in that submission. There was ample evidence of financial hardship to the worker. Indeed, absent contrary evidence, it would take little persuasion to convince a court that a worker, thrown onto social security by cessation of compensation payments, was more likely to be suffering hardship than the employer's insurer who might lose the practical opportunity to recover weekly payments found, in the end, to have been over-paid.

38. I have already referred to the submission that insufficient reasons were given by his Worship for his decision (see, generally, C & S Insulation Service Pty Ltd v Copley (1997) 136 FLR 317).

39. The remaining issue is whether the "Request" filed, seeking an award based on total incapacity, was inconsistent with the learned Magistrate's apparent finding that there was no evidence supporting such a finding after 5 June 1998. It was submitted, in the alternative, that, if there had been payments made on the basis of partial incapacity, there were no payments on a total incapacity basis to be resumed or continued.

40. That is, either total incapacity payments were appropriately ceased, so that there was no case for their continuance or resumption, or that, even if partial incapacity payments had arguably been wrongfully terminated, the only application before the Court was for total incapacity payments, thus they could be neither resumed nor continued in the absence of an application for an award based on a partial incapacity.

41. Support for that view was said to be derived from Barbaro v Leighton Contractors Pty Ltd (supra).

42. However, all that case decided was that, where an employer accepted a claim for benefits, without arbitration or formal agreement or award, then, if the employer sought to terminate such payments, it had to prove that it was entitled to do so. That entitlement, unless conceded by agreement, could not lawfully be given effect without an award in favour of the employer. Whilst in the case of payments made on a total incapacity basis, the employer has the onus of proving cessation of total incapacity, the employer does not need to prove the absence of partial incapacity. If, having failed to resist a claim that total incapacity has continued, the worker claims at least partial incapacity he or she has the onus of establishing that partial incapacity.

43. That decision does not, however, mean that a worker cannot request a finding of total incapacity and, instead, be granted a finding of partial incapacity. Nor does it mean that, on an application to resume payments, an interim order could not be made, even if total incapacity payments had been terminated, on the basis that they should be resumed on the basis that the worker could, arguably, establish partial incapacity.

44. Barbaro says nothing as to the procedure necessary to validly raise such an issue. The Magistrates Court has ample powers, in an arbitration under the WC Act and Rules, to deal with informality and defects in procedure. The real questions are, first, as to fairness. That is, if a case is fought or presented on a total incapacity basis, it may be unfair to the employer (or, in some cases, the worker) to switch the case to partial incapacity without due notice. Second, it is necessary to take account of the onus of proof. An employer terminating total incapacity payments bears only the onus of proving that total incapacity has ceased. A worker asserting that, instead, he or she was partially incapacitated, bears the onus of establishing that alternative case.

45. In the present case, whoever bears the onus of establishing total or partial incapacity, as the case may be, is of no significance. His Worship was satisfied that there was evidence that interim payments could be supported on the basis that there had been a continuing partial incapacity as from 5 June 1998 and made an interim order accordingly.

46. I can find no error in that approach or conclusion.

47. The appeal is dismissed.

48. I will hear the parties as to costs.

I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Higgins.

Associate:

Date: 18 October 1999

Counsel for the Appellant: Mr G Stretton

Solicitor for the Appellant: Deacons Graham & James

Counsel for the Respondent: Mr R Thomas

Solicitor for the Respondent: Bernard Collaery & Associates

Date of hearing: 17 August 1999

Date of judgment: 18 October 1999